Ireland Tax Deductions

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Ireland Tax Deductions

Ireland Tax Deductions

Relief is given mainly in the form of a credit on tax payable.
Some forms of relief are granted as a deduction, that is, a reduction in the taxable income.

  • Most relief refers exclusively to Irish residents.
  • The following amounts are subject to the definitions in law.

Class of Relief Amount - EUR
Basic credit 1,650
Exemption for a married couple 3,300
Exemption limits for a senior citizen 18,000
Single parent 1,650
Rent on a residential apartment Up to 2,400
Medical insurance Up to 20%
Payment to an approved pension scheme Subject to ceiling
Mortgage interest 20%-25% For first time buyers
Tuition fees 1,500-3,000

Ireland Business Deductions

In addition to the deductions/credits listed above, deductions and business expenses may be claimed as detailed below:
  • Offset of losses - A loss from one source of income may be offset against revenue from another source in the same tax year, including capital gains.
  • A loss may be offset forward without any limit on the number of years.
    A loss may be offset back for one year.
    In a cluster of EU resident companies with controlling shareholders who have a 75% holding, a loss in one company may be offset against the profits in another company in the group.
  • Transactions between affiliated parties - Transactions with affiliated companies with a material identity of ownership or control are carefully inspected by the tax authorities who compare the value of the transactions with accepted market prices.
  • Financing costs -Business financing costs may generally be deducted.
  • Financing costs for an affiliated company being held 75% or more by a non-treaty foreign owners is permitted only subject to the restrictions.
    In most cases the amount paid is not allowable as an expense.
  • Bad Debts - Provision for bad debts is allowable on certain conditions.
  • Depreciation Expenses - The straight-line method is the usual method of depreciation ,defined as capital allowance, in Ireland.

A depreciation table is presented below:

Asset Annual Depreciation (%)
Computers 12.5
Building 2 - 4
Machinery and equipment 12.5
Hotels 15
Vehicles 12.5
Buildings in Inner City Improvements Areas 50%

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